Pfizer to acquire Allergan for $160bn

Pfizer has agreed to acquire Allergan for about $160bn, making it one of the biggest deals.

Both the firms have several activities in cosmetics and personal care segments.

Pfizer owns several personal care brands such as Chapstick and Preparation H.

Under the terms of the proposed transaction, the businesses of both the companies will be combined under Allergan,Plc, which will be renamed Pfizer, Plc.

As part of the deal, Allergan shareholders will receive 11.3 shares of the newly combined company for each of their existing shares.

Pfizer stockholders will get one share of the combined company for each of their shares.

The transaction is expected to be completed in the second half of 2016.

Pfizer CEO and chairman Ian Read said: "Through this combination, Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry."

On completion of the transaction, the combined entity will maintain Allergan’s legal and tax residency in Ireland. Pfizer’s global operational headquarters will be situated in New York and its executive office will be located in Ireland.

The deal will see addition of Allergan’s Women’s Health and Anti-Infectives portfolio to Pfizer’s business.

Allergan will bring topical formulation, manufacturing and its Anda distribution capacities to the combined entity, which is estimated to generate annual operating cash flow of more than $25bn starting in 2018.